Amnesty and the U.S. Labor Market

The Employment Picture for Less-Educated Workers

Steven A. Camarota is the Director of Research at the Center for Immigration Studies.

Of the estimated 11 to 12 million illegal immigrants in the United States, seven to eight million are thought to be holding a job.1 Rather than enforce immigration laws and encourage them to return home, President Obama and some in Congress have promised to push legislation that would provide work authorization and legal status to illegal immigrants. Most research indicates that the overwhelming majority of illegal immigrants have no more than a high school education.2 The president and his political allies seem to believe that the kinds of jobs done by such workers are plentiful. However, the findings of this report show that the employment picture is bleak for less-educated native-born Americans, who are the most likely to compete with illegal immigrants for jobs. (All figures are seasonally unadjusted.)

Among the findings:

In the third quarter of 2012, the standard unemployment rate (referred to as U-3) for U.S.-born adults who have not completed high school was 18.5 percent.

Using the broader measure of unemployment (referred to as U-6, which includes those who want to work but have not looked recently, and those forced to work part-time), the unemployment rate for U.S.-born adults who have not completed high school was 30.8 percent.

The U-3 unemployment rate for U.S.-born workers who have only a high school education was 10.4 percent in the third quarter of 2012. Using the U-6 measure, it was 18.1 percent.

The total number of U.S.-born working-age adults (18 to 65) not working was 50.8 million in the third quarter of 2012. This is up 8.9 million compared to the third quarter of 2007, before the recession began.

If we consider all American citizens (U.S.-born and naturalized), the number of working-age adults not holding a job was 54.7 million.

More than half (27.7 million) of working-age American citizens not holding a job have no education beyond high school. This is a huge pool of potential less-skilled workers.

The figures for less-educated citizens not working do not include the 3.2 million forced to work part-time, nor do they include the 6.7 million teenagers (16 and 17) not working. They also do not include the nearly 170,000 less-educated U.S. citizens over age 65 who are actively looking for a job.

Introduction

All of the available evidence indicates that the employment picture for those with relatively little education remains dismal. Things are particularly dire for those under age 30 who have no more than high school education. Prior research indicates that illegal immigrant workers are overwhelmingly those with relatively little education. While it would be a mistake to think that every job taken by an illegal immigrant is a job lost by a native, it would also be a mistake to imagine that allowing illegal immigrants to stay permanently in their jobs has no impact on labor market outcomes for U.S.-born workers. The findings in this analysis make clear that Americans with relatively little education have been hit very hard by the current downturn.

Unemployment (U-3 & U-6). The left side of Table 1 shows the unemployment rate for all workers using the standard U-3 measure. To be unemployed using the standard U-3 measure, one has to have looked for a job in the last four weeks. Table 1 shows that unemployment varies significantly by group. Unemployment is very high for teenagers, those without a high school diploma, and young high school graduates. One of the most important findings in Table 1 is that those natives who are young (18 to 29) with a high school education have an unemployment rate similar to those who have not completed high school (all ages) — 18.5 percent vs. 17.2 percent.

Another important finding is that unemployment is much higher for young and less-educated U.S.-born minorities than for the population as a whole. For example, U-3 unemployment is 29.5 percent for U.S.-born blacks (all ages) who have not completed high school, much higher than for all natives without a high school education. For young blacks (18 to 29) who have completed high school, unemployment is also much higher than for all young U.S.-born workers with the same education. Unemployment for U.S.-born Hispanics also is somewhat higher than for all U.S.-born workers with the same education.

The right side of Table 1 shows unemployment using the broader measure (referred to as U-6) that includes those who want to work, but have not looked recently, and those forced to work part-time. (The methodology section at the end of this report summarizes how U-3 and U-6 are calculated.) The broader measure of unemployment shows things are very bleak for American workers. For those without a high school education (all ages), U-6 unemployment is 30.8 percent, compared to 18.5 percent for U-3 unemployment. For young high school graduates, the U-6 measure is 29.9 percent compared to 17.2 percent using the U-3 measure.

The U-6 measure shows things are also dismal for U.S.-born minorities. For U.S.-born Hispanics without a high school education the U-6 unemployment rate is 32.5 percent. For young U.S.-born Hispanic high school graduates, the U-6 unemployment rate is 28.8 percent. For U.S.-born blacks the situation is even worse. These young and less-educated workers are the ones most likely to compete with illegal immigrants for jobs. And they are the ones most likely to benefit from having fewer illegal immigrants in the country.

Not Working. The U-3 and U-6 measures both deal with those who express some interest in working. Some of those included in the U-6 measure are considered to be outside of the labor force because they have not looked for a job in the last four weeks. Thus if someone has not looked recently for a job and has given up entirely looking for work, then he or she would not be part of the U-3 or even the U-6 measure of unemployment. The right side of Table 2 reports the share of working-age adults (18 to 65) not in the labor force. It also shows the number holding a job. Table 2 shows that in third quarter of 2012, nearly 41 million U.S.-born adults were not in the labor force — not working or looking for work. If we include the 9.8 million U.S.-born adults (18 to 65) who are unemployed, the total number not working would be 50.8 million, an increase of 8.9 million since the third quarter of 2007.

We can see the increase in the number not working by comparing Table 2 to Table 4. Table 4 shows the same information as Table 2 except that it is for the third quarter of 2007, before the recession began. There would seem to be a huge pool of legal workers available in the United States. Table 4 shows that in the third quarter of 2007, 73.6 percent of U.S.-born working-age adults were employed. In the third quarter of 2012, it was 69 percent. If we returned to the 2007 employment rate, roughly 7.5 million more U.S.-born adults would be working.

Conclusion

It is difficult to overstate the size of the pool of potential workers that now exists in the United States. If through enforcement a large fraction of illegal immigrants returned to their home countries rather than being allowed to stay with legal status, there would seem to be an ample supply of idle workers to replace them, particularly workers who have relatively little education. Of course, employers might have to pay more, and offer better benefits and working conditions in order to attract American citizens. But improving the living standards and bargaining power of the least-educated and poorest American workers can be seen as a desirable social outcome. The contention that there is a general labor shortage that has to be satisfied by giving work authorization and/or citizenship to illegal immigrants and increasing the number of immigrants allowed into the country seems entirely inconsistent with the available evidence.

Methodology

The data for all of the tables in this study come from the public-use files of the July, August, and September 2012 Current Population Surveys (CPS) and the July, August, and September 2007 CPSs, which are collected monthly by the Census Bureau for the Bureau of Labor Statistics (BLS). Each CPS includes about 131,000 respondents, roughly half of whom are in the labor force. The tables presented here are reported by quarter. Quarterly data are more statistically robust, especially for smaller populations like immigrants and minorities, due to the inclusion of three months of data. Persons in institutions like prisons or nursing homes are not included in the CPS. The CPS is the nation’s primary source for unemployment and other labor force statistics. Like all government surveys, the data are weighted to reflect the actual size and demographic makeup of the U.S. population.

The government publishes employment statistics that are both seasonally adjusted and unadjusted from the survey. The figures in this analysis are seasonally unadjusted. Unadjusted figures are computationally simpler and easier for other researchers to replicate. In general, BLS does not provide separate estimates for the foreign-born (immigrants) and the native-born broken down by characteristics like education, race, and age. However, all CPS respondents are asked these questions. The Census Bureau defines the foreign-born as persons who are not U.S. citizens at birth, which includes naturalized citizens, legal immigrants who are not citizens (green card holders), temporary visitors and workers, and illegal immigrants. All figures for the total U.S. population (ages 16-plus) at the top of Tables 1 and 2 match those from the BLS.

Defining Unemployment. The standard measure of unemployment, referred to as U-3, takes the number of people who report that they are not working and have looked for a job in the last four weeks and divides it by the number actually working plus those looking. Those not actively looking for a job are not included in either the numerator or denominator when calculating the unemployment rate for U-3.

The broader measure of unemployment, referred to as U-6, is calculated differently. It divides the sum of the unemployed population, involuntary part-time workers, and marginally attached people (discouraged and other) by the civilian labor force (employed and unemployed) plus marginally attached workers. The column headings in Tables 1 and 3 show this calculation. An unemployed worker is someone who does not currently hold a job, but is available to work and has looked for a job in the previous four weeks. Marginally attached workers indicate that they want and are available for jobs, and they have looked for work in the past 12 months.3 However, they are not considered unemployed under the U-3 definition because they have not searched for a job in the previous four weeks. Involuntary part-time workers are those individuals who report that they are working part-time for economic reasons. They want and are available for full-time work, but must instead settle for part-time hours.4 Because the total U-6 measure includes the unemployed, those working involuntarily part-time, and those marginally attached to the labor market (discouraged and other), it provides a broad measure of problems in the U.S. work force.

3 Marginally attached workers indicate that they looked for work in the last 12 months, but not in the prior four weeks. The marginally attached are comprised of two groups, both of which are included in U-6. (The variable in the CPS used to determine this population is prdisc). One group is considered “discouraged”. Discouraged workers provide a reason related to market conditions for why they are not currently looking for a job. The second group of marginally attached workers indicates that they are conditionally interested in finding work and are referred to as “other marginally attached workers”. These individuals provide reasons such as family responsibilities, school attendance, illness, and transportation problems for why they have not searched for work in the previous four weeks.

4 Involuntary part-time workers respond that they are working part-time (one to 34 hours a week) for economic reasons. This includes those who usually work full-time and those who usually work part-time. They share a desire to work full-time.

The Center for Immigration Studies is an independent, non-partisan, non-profit research organization founded in 1985.
It is the nation's only think tank devoted exclusively to research and policy analysis of the economic, social, demographic,
fiscal, and other impacts of immigration on the United States.